Vostro Account


DEFINITION of 'Vostro Account'

The account that a correspondent bank, usually located in the United States or United Kingdom, holds on behalf of a foreign bank. A vostro account is one in which the domestic bank (from the point of view of the currency in which the account is held) acts as custodian or manages the account of a foreign counterpart. Also known as a loro account.

BREAKING DOWN 'Vostro Account'

For instance, if a Spanish life insurance company approaches a U.S. bank to manage funds in an account for the Spanish life insurer's behalf, the account would be deemed a vostro account of the insurer.

The term vostro is Latin for "yours," thus when translated literally, it means "your account."

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  1. What role does a correspondent bank play in an international transaction?

    A correspondent bank is most typically used in international buy, sell or money transfer transactions to facilitate foreign ... Read Full Answer >>
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